APA greenlights $259 million Sybella Creek Solar and Battery project in Mount Isa
APA Group (ASX:APA) has made a final investment decision to construct, own and operate the 72 MW Sybella Creek Solar Farm (SCSF) and a 52 MW / 104 MWh Battery Energy Storage System (BESS) in Mount Isa, Queensland. The energy infrastructure group will invest $259 million in the combined development.
The project is underpinned by an Energy Supply Agreement (ESA) with Ernest Henry Mining Pty Ltd, a wholly owned subsidiary of Evolution Mining (ASX:EVN), running until mid-2046. The announcement was also released to APA Infrastructure Limited (ASX:AP2).
For investors, the arrangement running until mid-2046 adds a long-dated revenue stream that diversifies APA’s customer base and, according to the company, supports ongoing earnings growth.
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Investment snapshot: What APA is building and why
The development pairs solar generation with battery storage and existing gas-powered firming to deliver a single energy solution for a remote mining region. Key facts from the announcement include:
- Solar Farm capacity: 72 MW
- Battery storage: 52 MW / 104 MWh
- Total investment: $259 million
- Offtake: ESA with Ernest Henry Mining (Evolution Mining subsidiary) until mid-2046
- Funding: from existing balance sheet capacity
- Part of APA’s ~$3.5 billion organic growth pipeline
Funding the $259 million development from existing balance sheet capacity follows APA’s April 2026 debt raise, in which the group secured $1.5 billion through a dual-tranche offering that was nearly four times oversubscribed, reinforcing the headroom available for project commitments of this scale.
A central element of the structure is APA’s existing gas-powered Diamantina Power Facility. Under the ESA, Diamantina will provide firming capacity and energy supply that complements the new renewable assets. Together, the company states, these assets deliver a “holistic, lower emissions energy solution” for Ernest Henry’s operations while improving reliability at a lower cost.
| Component | Detail | Contract / Funding | Investor Impact |
|---|---|---|---|
| Solar Farm | 72 MW capacity | Part of $259M investment | Adds renewable generation to APA’s portfolio |
| Battery (BESS) | 52 MW / 104 MWh | Part of $259M investment | Enhances network reliability and resilience |
| ESA offtake | Ernest Henry Mining (Evolution subsidiary) | Runs until mid-2046 | Contracted revenue stream until mid-2046 |
| Funding source | $259 million total | Existing balance sheet capacity | No new external funding flagged |
Understanding solar-plus-battery firming for mining operations
For a remote mining region connected to the North West Power System, this hybrid approach carries particular relevance. According to APA CEO and Managing Director Adam Watson, combining locally developed renewables with existing gas-powered firming assets is “the most efficient way to deliver the energy needed to underpin growth and energy security in this critical Queensland growth region”, improving reliability at a lower cost while enhancing network resilience for mining customers and the local community.
The gas-powered Diamantina Power Facility provides that firming capacity to improve reliability.
What the deal means for APA’s growth strategy
The final investment decision aligns with several strands of APA’s broader strategy. Management states the project diversifies the customer base, supports ongoing earnings growth and builds further momentum in APA’s remote power generation growth strategy. It also supports further efficiencies in the operation of the Diamantina Power Facility.
On returns, the company notes the project is expected to deliver returns consistent with APA’s required return hurdles. It sits within the group’s ~$3.5 billion organic growth pipeline and is funded from existing balance sheet capacity.
APA’s organic growth pipeline has been a consistent theme in recent reporting periods, with the group’s 1H26 results showing new asset contributions from Port Hedland Solar and Battery among the drivers of a 7.6% EBITDA lift to $1.09 billion.
The announcement is framed against a supportive policy backdrop. APA referenced the Queensland Government’s recent launch of “Delivering Queensland’s Critical Minerals Future 2026 – 2030”, which sets out a plan to grow the minerals sector, build sovereign capability and attract new investment across the North West Minerals Province.
CEO and Managing Director Adam Watson
“In addition to supporting further efficiencies in the operation of the Diamantina Power Facility, this project diversifies our customer base, supports ongoing earnings growth and will further improve energy security in Mount Isa.”
Construction timeline and next steps
The announcement sets out a clear project roadmap:
- Construction anticipated to commence in late 2026
- Project completion planned by mid-2028
- ESA runs until mid-2046
With the development funded from existing balance sheet capacity and forming part of the group’s organic growth pipeline, no new external funding has been flagged in connection with the project.
Watson pointed to APA’s continued role in the region, stating the company is proud of the part it plays in Mount Isa and looks forward to working with government and local community stakeholders to progress further opportunities. APA owns and operates more than $20 billion of energy infrastructure and delivers around half of Australia’s domestic gas through more than 15,000 kilometres of pipelines, providing scale context for its expanding remote power generation activity.
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